Netherlands-headquartered ING has commenced sale of its direct banking division in the US.
The divestiture by 2013 was ordered by the European Union following INGs receipt of a 10bn ($14bn) bail-out by the Dutch government.
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ING Direct in the US is valued at $8.9bn.
In addition, the bank is to also sell its insurance business as well as several assets from its retail banking division in the Netherlands in two initial public offerings.
The bank estimated total separation costs in 2011 to amount to 200m after tax. It had paid a net sum of 85m in 2010.
Jan Hommen, CEO of ING, said on 26 October 2009.
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By GlobalDataSplitting the company is not a decision we took lightly. ING has ( ) been a strong advocate for combining banking and insurance in one company."
The combination provided us with advantages of scale, capital efficiency and earnings stability through a diversified portfolio of businesses. However, the financial crisis has diminished these benefits. Now, the widespread demand for greater simplicity, reliability and transparency has made a split the optimal course of action.
The sale of ING Directs US business comes after the unit returned to profit in fiscal 2010 with a pre-tax income of 648m versus a pre-tax loss of 7m in the previous year.
Funds entrusted at the unit increased by 11.3% to 58bn.
At group level, total deposits at ING Direct grew in fiscal 2010 by 9.6% to 238.1bn.
